Illinois Pension Debt Higher Than Reported

A new study by Truth in Accounting discovered that while Illinois’ Comprehensive Annual Financial Report says that the state has $108.6 billion dollars in pension debt, the truth is even worse. Due to accounting loopholes, Illinois is able to hide the fact that its true pension debt is $116.7 billion.

Reboot Illinois has more on the topic:

Truth in Accounting’s annual financial state of the state report found Illinois has amassed nearly $213 billion in unpaid bills, including more than $40 billion in hidden pension debt.

Despite new accounting rules put in place by the Governmental Accounting Standards Board that require state and local governments to report all of its pension liabilities, Illinois continues to omit billions in unfunded pension obligations, says Truth in Accounting CEO Sheila Weinberg.

“Because of budgeting and accounting gimmicks the state uses, Illinois has been able to exclude massive debts off its balance sheet and hide related costs from taxpayers,” Weinberg said in a news release. “Unfortunately all of these financial problems are coming to a head in Illinois.”

While the Illinois comptroller’s Comprehensive Annual Financial Report for fiscal year 2015 puts the state’s net pension liability at $108.6 billion, Truth in Accounting’s analysts say that figure is underreported by about $8.1 billion, meaning Illinois’ unfunded pension liabilities are actually $116.7 billion.

The report also found an additional $32.3 billion in hidden retiree health care debt, bringing the state’s total hidden debt to $40.4 billion.

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As of June 30, 2015, Illinois had $74 billion in assets. But when capital and restricted assets are excluded, the state only had $25.9 billion to pay $212.8 billion worth of bills — a $186.9 billion shortfall.

Read the full report here.